How do I explain what effect an increase in government spending may have on unemployment and inflation in an economy?

The best way to answer this question would be by using the help of a Keyenesian diagram. After drawing the standard long-run supply curve and aggregate demand curves we can show what effect an increase in government spending will have. As government spending is a component of aggregate demand, an increase in government spending will lead to an increase in aggregate demand; this can be demonstrated on the diagram by a shift rightwards of the AD curve. After drawing this in, all we have to do is refer to the diagram to see what has happened to the price level and Real GDP. We should see an increase in both, and we can explain this by saying that the price level has increased due to the utilisation of scarce resources, and that the increase in real GDP corresponds to a decrease in unemployment.